House prices steady but apartments will cost you 20pc more
By LOUISE TRECCASI
07jan06

PRICES for city apartments have sky rocketed by more than 20 per cent in the past year, despite a sharp fall in the number of sales.

In comparison, Adelaide house prices have stabilised, recording a 0.36 per cent rise in the December quarter and a 2.22 per cent jump for the year.

State Government December quarter figures released to The Advertiser show the median price for CBD units and apartments is $290,000 - 21.09 per cent higher than 12 months ago. In the December quarter, prices grew by 16 per cent.

There were 61 city apartment sales in the quarter - down from 152 sales in the 2004 December quarter and up from the 58 in the three months to September last year.

Apartment developer Urban Construct said the figures reflected a "buoyant market", despite the fall in sales.

"Buying apartments continues to be an investment opportunity and Adelaide continues to buck the national trend and show steady, solid growth," director Todd Brown said.

Units and apartments across the metropolitan area recorded no price change in the quarter but saw a 4.55 per cent fall for the year.

The Adelaide median house price rose from $275,000 to $276,000 in the December quarter. Across the state, prices rose 1.59 per cent in the quarter and climbed 3.24 per cent for the year.

The growth was fuelled by strong results in country regions. Rural areas recorded a 3.64 per cent price rise in the December quarter and a 5.71 per cent jump for the year. Real Estate Institute of South Australia president Mark Sanderson said the state's property market was set for another good year in 2006.

"House prices in the metropolitan region can basically be summed up as 'steady as she goes'," he said. "The Adelaide market is not going backwards, rather it is consistently moving along."

The data shows Adelaide's median house price for the September quarter has been revised to $275,000 - up from $272,000.

"This revision means that the Adelaide housing market still has not experienced a drop in five years," Mr Sanderson said.

He said city living was very attractive and "people had taken the opportunity to snap up some great developments".

Useless article. Many arguments about the state of the market can be made, depending on which information is made available. The required info is not in the article, so essentially we have to take her word for it.

Whilst letting the Advertiser think for me is really high up there on my to-do list, i've got better things to do, such as pissing on an electric fence.

House prices to boom
Article from: Font size: Decrease Increase Email article: Email Print article: Print Submit comment: Submit comment June 17, 2007 12:15am
HOUSE prices are set to jump up to 15 per cent â€“ or an average $45,000 â€“ in the next year, with real estate experts predicting a South Australian property boom.

After successive years of double digit property price growth in the early 2000s, Adelaide recorded a below-inflation increase of just 3.6 per cent last year, the smallest in a decade.
But the Real Estate Institute of SA said the market was now as strong as the boom year of 2003, which saw average house prices soar 16 per cent.

"The feedback I'm getting from institute members is the market is strong across all Adelaide suburbs, not just a number of pockets," REISA president Mark Sanderson said.

"The demand for property is brilliant and it's better than 2003, which was a boom year."

A surging economy, coupled with stable interest rates, would see increasing demand for SA houses, according to real estate analyst firm Australian Property Monitors.

This increasing demand would see Adelaide become the best performing state capital for average house price growth over the next year, APM operations manager Michael McNamara said.

"Adelaide will be the star performer of all the capital cities," he said.

"An increase in house prices anywhere between 10 per cent to 15 per cent in the next 12 months is more than likely.

"Auction clearance rates in Adelaide are the best in the nation and with continued wage growth and limited land release by the State Government, demand for housing will continue to be strong."

And the double digit price rises would not be confined to Adelaide.

"Towns such as Port Augusta, Port Pirie, Whyalla and Roxby Downs are well placed to realise price rises on the back of the resource boom, which will continue throughout 2007 and beyond," Mr McNamara said.

Demand for Adelaide houses, worth an average $300,000 according to the Valuer-General, was also being driven by interstate investors taking advantage of our relatively cheap prices, according to the REISA.

"Investors from Western Australia are buying properties, and we are also seeing greater numbers of migrants in the marketplace," Mr Sanderson said.

Oversupply hits city units
May 04, 2008 12:30am
VACANCY rates for city apartments have hit their highest level in four years, figures show.

Adelaide vacancy levels are now running at more than twice the overall metropolitan average because of an apartment building boom that also is putting downward pressure on prices and rental returns.
The city vacancy rate of 4 per cent is well above the 1.8 per cent for the total metropolitan area â€“ and almost four times the 1.15 per cent in the northern suburbs, latest Real Estate Institute of SA figures show.

Since 2000, 53 apartment projects worth $383 million have been completed in the city, with a further 20 projects worth $262 million approved but yet to be built.

Real estate franchise Brock Harcourts chief executive Greg Moulton said he believed there was no justification for theapartment building boom in the city.

"I can't understand with our small population growth why there is any sense to the building of so many units in the CBD," Mr Moulton said.

"The city and North Adelaide stand out because of the amount of vacant properties on the market through development."

He said high vacancy rates deterred property investors.

"If I was an investor I would steer clear of apartments because prices will be softer," he said.

AG wrote:
That makes no economic sense. If there is an oversupply, the median price in the CBD would be falling and wouldn't be overpriced. Of course it's a bit more complex than that.

My theory was that high prices are, at least to some extent, perturbing people from absorbing the new supply of city housing. Now that an oversupply is developing, hopefully prices will drop, and the market will level out. Of course, it is complex, and I'm certainly no economist, but that was my thought on the matter.

As I am looking to sell my apartment in the city, I was a bit worried when I first read that article. But then I realised that this was just another case of The Advertiser/Sunday Mail scare-mongering.
Apartment prices have risen steadily, not as much as land in the city but a considerable amount. I bought my apt 3 years ago for 230k, I have been told by all realtors I have spoken to that I will be able to expect between 330-350k. Not a bad investment.
However when compared to houses/townhouses in the city, this growth is a little soft. I looked at a townhouse on Sat that was asking 480+k compared to 375k 12 months ago.

I do worry about the excessive amount of apt projects coming online in the next couple of years hence the reason I am selling. This is only part of the reason though.

well i reckon there's a lot of over priced city apartments at the moment which may be a cause of the vacancy rates. Some of them are not value for money. By putting in only a granite bench top in the kitchen, and nice tap fittings, developers sell them as luxury apartments when they're no more luxury than you new stock-standard home built at Craigmore or Seaford. Ive looked in those apartments on North Tce (over road from hospital, forgotten name, next to Ayers House), and they were terrible, mainly caus they were tiny inside, no balcony, hardly any outside facing windows, 2nd bedroom could hardly fit a bed and nothing more, yet they were trying to sell them for almost 300,000. Its these overpriced "luxury" (NOT) units that are causing the vacancy rates IMO.

jk1237 wrote:well i reckon there's a lot of over priced city apartments at the moment which may be a cause of the vacancy rates. Some of them are not value for money. By putting in only a granite bench top in the kitchen, and nice tap fittings, developers sell them as luxury apartments when they're no more luxury than you new stock-standard home built at Craigmore or Seaford. Ive looked in those apartments on North Tce (over road from hospital, forgotten name, next to Ayers House), and they were terrible, mainly caus they were tiny inside, no balcony, hardly any outside facing windows, 2nd bedroom could hardly fit a bed and nothing more, yet they were trying to sell them for almost 300,000. Its these overpriced "luxury" (NOT) units that are causing the vacancy rates IMO.

I believe the apartments you are referring to is the Palais complex. You would not consider
these as luxury apartments - aimed more at student accommodation

well they are not selling them at student accomm prices. Ive noticed they have had their same marketing slogan for well over a year "only 2 apartments left for sale".
I also find it odd when riding home from Rundle St towards Kent Town at night, that there are hardly any lights on in any of the units in the main Brewery aptment building, that face the city. The other building seems to be well occupied though. Ive heard the Brwery aptmnts are quite expensive for what you get.

Just a quick edit. Maybe further relaxing height restrictions will allow developers to make enough money (at less expense of the buyers), because of 'economies of scale', ie because ideally if you were the developer, for the plot of land, you would want a higher building, so as to sell more units. The construction cost of increasing a proposed aprtment building from 10 to 20 storey's wouldn't be as much as being forced to have two 10 storey buildings, I think.